ProTech SMART PPE

FINANCIAL PLAN

MEMBERS Andres, John David M.

Torres, Yhancie Mae R.
COURSE IE103 (Technopreneurship 101)
SECTION A5
DATE January 29, 2021

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Financial Plan 01.29.2021 | Draf

SECTION 1: Investment / Start-Up Capital Funding Requirement

Year 1 Year 2 Year 3 Year 4 Year 5
Pre-operating Expenses
Lease Deposit 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
Licenses & Permits 23,500.00 23,500.00 23,500.00 23,500.00 23,500.00
Deposit (Electricity, Gas, Water) 250,500.00 260,000.00 270,000.00 280,000.00 300,000.00
Business Structure Cost 300,000.00 300,000.00 300,000.00 300,000.00 300,000.00
Legal Fees (Agreements) 190,000.00 200,000.00 200,000.00 200,000.00 200,000.00
Accounting Fees (Advice) 300,000.00 310,000.00 320,000.00 330,000.00 350,000.00
Prepaid Insurance 2,100,000.00 2,170,000.00 2,240,000.00 2,310,000.00 2,380,000.00
Factory Overhead 450,000.00 465,000.00 480,000.00 495,000.00 510,000.00
Prepaid Insurance 5,150,000.00 5,655,000.00 6,160,000.00 6,665,000.00 7,170,000.00
Pre-opening staff training & wages 3,100,000.00 3,170,000.00 3,240,000.00 3,310,000.00 3,380,000.00
Total (Php) 12,864,000.00 13,553,500.00 14,233,500.00 14,913,500.00 15,613,500.00

Initial Working Capital Month 1 Month 2 Month 3

Current Assets
Account Receivables 25,500,000.00 30,000,000,00 46,000.000.00
Inventory 12,900,000.00 13,500,000.00 15,000,000.00
Other Current Assets 2,500,000.00 4,500,000.00 6,500,000.00
Total Current Assets (Php) 40,900,000.00 48,900,000.00 67,500,000.00

Current Liabilities
Account Payables 10,500,000.00 11,500,000.00 15,500,000.00
Inventory 600,000.00 800,000.00 1,000,000.00
Other Current Liabilities 960,000.00 1,100,000.00 1,130,000.00
Total Current Liabilities (Php) 12,060,000.00 13,400,000.00 17,630,000.00

Year 1 Year 2 Year 3 Year 4 Year 5

Cash Requirement (Cash Flow)
Starting Cash 61,704,650.00 70,643,632.50 81,671,064.13 93,209,617.33 105,256,848.20

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Cash in 27,000,000.00 29,140,000.00 31,360,000.00 33,660,000.00 36,040,000.00

Earned 6,170,465.00 6,357,926.93 7,350,395.77 8,388,865.56 9,473,116.34
Contributed 3,035,050.00 3,393,052.50 3,532,705.13 3,679,340.38 3,833,307.40
Cash Out 8,814,950.00 10,091,947.50 11,667,294.88 13,315,659.62 15,036,692.60
Operation 11,850,000.00 13,485,000.00 15,200,000.00 16,995,000.00 18,870,000.00
Cost of Goods 15,150,000.00 15,655,000.00 16,160,000.00 16,665,000.00 17,170,000.00
Ending Cash 67,875,115.00 77,001,559.43 89,021,459.90 101,598,482.89 114,729,964.54

SECTION 2: Key Assumptions

Capital Mix - Owners' Equity + Long-Term Debt Year 1 Year 2 Year 3 Year 4 Year 5
Current Assets
Cash and cash equivalents 240,000,000.00 290,000,000.00 310,000,000.00 340,000,000.00 400,000,000.00

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Short-term marketable securities 13,600,000.00 14,600,000.00 15,800,000.00 16,600,000.00 18,000,000.00

Accounts receivables 56,000,000.00 59,000,000.00 59,500,000.00 63,000,000.00 66,000,000.00
Inventories 89,000,000.00 92,000,000.00 97,000,000.00 109,000,000.00 120,000,000.00
Vendor Non-trade receivables 20,300,000.00 23,000,000.00 24,600,000.00 28,000,000.00 30,000,000.00
Other current assets 15,700,000.00 16,700,000.00 18,900,000.00 25,100,000.00 27,500,000.00
Total Current Assets (PHP) 434,600,000.00 495,300,000.00 525,800,000.00 581,700,000.00 661,500,000.00

Long-term Marketable securities 140,000,000.00 156,000,000.00 179,000,000.00 190,000,000.00 210,000,000.00

Property, Plant, and Equipment 130,600,000.00 167,800,000.00 187,900,000.00 210,900,000.00 289,700,000.00
Goodwill 26,000,000.00 27,800,000.00 29,700,000.00 31,200,000.00 35,500,000.00
Acquired intangible assets, net 50,000,000.00 52,300,000.00 54,500,000.00 56,700,000.00 58,900,000.00
Other non-current assets 10,300,000.00 10,870,000.00 11,230,000.00 11,890,000.00 12,100,000.00
Total Assets (PHP) 356,900,000.00 414,770,000.00 462,330,000.00 500,690,000.00 606,200,000.00

Current Liabilities
Accounts payable 57,000,000.00 61,000,000.00 63,240,000.00 65,670,000.00 68,880,000.00
Accrues expenses 11,300,000.00 12,400,000.00 13,500,000.00 13,900,000.00 14,100,000.00
Deferred revenue 5,609,000.00 5,980,000.00 6,120,000.00 6,590,000.00 6,860,000.00
Commercial paper 5,000,000.00 6,700,000.00 7,100,000.00 7,350,000.00 7,600,000.00
Current portion of long-term debt 3,600,000.00 3,960,000.00 4,100,000.00 4,560,000.00 5,100,000.00
Total Current Liabilities (PHP) 82,509,000.00 90,040,000.00 94,060,000.00 98,070,000.00 102,540,000.00

Deferred revenue, non-current 112,900,000.00 113,300,000.00 213,500,000.00 213,900,000.00 214,100,000.00

Long-term debt 15,609,000.00 16,980,000.00 17,120,000.00 18,590,000.00 19,860,000.00
Other non-current liabilities 2,000,000.00 2,700,000.00 3,100,000.00 3,350,000.00 3,600,000.00
Total Liabilities (PHP) 130,509,000.00 132,980,000.00 233,720,000.00 235,840,000.00 237,560,000.00

Commitments and contingencies

Shareholder’s Equity 86,900,000.00 88,300,000.00 89,230,000.00 91,700,000.00 93,500,000.00

Common stock and additional paid-in capital 27,500,000.00 29,500,000.00 31,400,000.00 32,600,000.00 33,500,000.00

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Retained earnings 140,000,000.00 190,000,000.00 210,000,000.00 240,000,000.00 260,000,000.00

Accumulated other comprehensive income (/loss) 89,000,000.00 91,000,000.00 92,000,000.00 93,000,000.00 95,000,000.00
Total Shareholder’s Equity 86,900,000.00 88,300,000.00 89,230,000.00 91,700,000.00 93,500,000.00
Total Liabilities and Shareholder’s Equity (PHP) 430,300,000.00 487,100,000.00 511,860,000.00 549,000,000.00 575,500,000.00

Debt-to-Equity (PHP) 1.50 1.51 2.62 2.57 2.54

Year 1 Year 2 Year 3 Year 4 Year 5

Schedule of Depreciation for Capital Assets
Technology
Year 1 1,223,500.00 1,223,500.00 1,223,500.00 1,223,500.00 0.00
Year 2 860,000.00 860,000.00 860,000.00 860,000.00
Year 3 790,000.00 790,000.00 790,000.00
Year 4 1,730,000.00 1,730,000.00
Year 5 790,000.00
Subtotal 1,223,500.00 2,083,500.00 2,873,500.00 4,603,500.00 4,170,000.00

Property & Equipment

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Year 1 6,223,500.00 6,223,500.00 6,223,500.00 6,223,500.00 0.00

Year 2 1,860,000.00 1,860,000.00 1,860,000.00 1,860,000.00
Year 3 990,000.00 990,000.00 990,000.00
Year 4 3,730,000.00 3,730,000.00
Year 5 1,860,000.00
Subtotal 6,223,500.00 8,083,500.00 9,073,500.00 12,803,500.00 8,440,000.00

Total (Php) 7,447,000.00 10,167,000.00 11,947,000.00 17,407,000.00 12,610,000.00

Year 1 Year 2 Year 3 Year 4 Year 5

Schedule of Long-Term Loan Amortization and Interest Payments
Payment 99,000.00 110,000.00 124,000.00 138,000.00 156,000.00
Principal 245,000.00 345,000.00 415,000.00 525,000.00 645,000.00
Interest 54,000.00 54,000.00 64,000.00 71,000.00 76,000.00
Balance 93,000.00 133,000.00 153,000.00 133,000.00 83,000.00

SECTION 3: Pro-forma 5-year Financial Statements

Profit and Loss Statement

Year 1 Year 2 Year 3 Year 4 Year 5

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SALES REVENUE
Quantity ₱ 6,000.00 ₱ 6,200.00 ₱ 6,400.00 ₱ 6,600.00 ₱ 6,800.00
Sale Price ₱ 4,500.00 ₱ 4,700.00 ₱ 4,900.00 ₱ 5,100.00 ₱ 5,300.00
Total (PHP) ₱ 27,000,000.00 ₱ 29,140,000.00 ₱ 31,360,000.00 ₱ 33,660,000.00 ₱ 36,040,000.00

COST OF GOODS SOLD

Direct Materials ₱ 12,600,000.00 ₱ 13,020,000.00 ₱ 13,440,000.00 ₱ 13,860,000.00 ₱ 14,280,000.00
Direct Labor ₱ 2,100,000.00 ₱ 2,170,000.00 ₱ 2,240,000.00 ₱ 2,310,000.00 ₱ 2,380,000.00
Factory Overhead ₱ 450,000.00 ₱ 465,000.00 ₱ 480,000.00 ₱ 495,000.00 ₱ 510,000.00
Total (PHP) ₱ 15,150,000.00 ₱ 15,655,000.00 ₱ 16,160,000.00 ₱ 16,665,000.00 ₱ 17,170,000.00

GROSS MARGIN ₱ 11,850,000.00 ₱ 13,485,000.00 ₱ 15,200,000.00 ₱ 16,995,000.00 ₱ 18,870,000.00

GENERAL, SELLING, & ADMINISTRATION EXPENSES

Salaries & Benefits ₱ 1,735,050.00 ₱ 1,821,802.50 ₱ 1,912,892.63 ₱ 2,008,537.26 ₱ 2,108,964.12
Distribution ₱ 250,000.00 ₱ 262,500.00 ₱ 275,625.00 ₱ 289,406.25 ₱ 303,876.56
Selling & Promotion ₱ 25,000.00 ₱ 26,250.00 ₱ 27,562.50 ₱ 28,940.63 ₱ 30,387.66
Utilities ₱ 350,000.00 ₱ 367,500.00 ₱ 385,875.00 ₱ 405,168.75 ₱ 425,427.19
Depreciation ₱ 300,000.00 ₱ 315,000.00 ₱ 330,750.00 ₱ 347,287.50 ₱ 364,651.88
Janitorial and Security Services ₱ 150,000.00 ₱ 350,000.00 ₱ 350,000.00 ₱ 350,000.00 ₱ 350,000.00
Maitenance, Repair, and Operation ₱ 100,000.00 ₱ 100,000.00 ₱ 100,000.00 ₱ 100,000.00 ₱ 100,000.00
Insurance ₱ 100,000.00 ₱ 100,000.00 ₱ 100,000.00 ₱ 100,000.00 ₱ 100,000.00
Miscellaneous ₱ 25,000.00 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00 ₱ 50,000.00
Total (PHP) ₱ 3,035,050.00 ₱ 3,393,052.50 ₱ 3,532,705.13 ₱ 3,679,340.38 ₱ 3,833,307.40

NET INCOME BEFORE TAX (NIBT) ₱ 8,814,950.00 ₱ 10,091,947.50 ₱ 11,667,294.88 ₱ 13,315,659.62 ₱ 15,036,692.60

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CORPORATE TAX EXPENSE ₱ 2,644,485.00 ₱ 3,027,584.25 ₱ 3,500,188.46 ₱ 3,994,697.89 ₱ 4,511,007.78

NET INCOME AFTER TAX (NIAT) ₱ 6,170,465.00 ₱ 7,064,363.25 ₱ 8,167,106.41 ₱ 9,320,961.73 ₱ 10,525,684.82

Profitability Ratio 10% 10% 10% 10% 10%

Dividends Paid ₱ 706,436.33 ₱ 816,710.64 ₱ 932,096.17 ₱ 1,052,568.48

RETAINED EARNINGS ₱ 6,170,465.00 ₱ 6,357,926.93 ₱ 7,350,395.77 ₱ 8,388,865.56 ₱ 9,473,116.34

Cash Flow Statement

Year 1 Year 2 Year 3 Year 4 Year 5

CASH INFLOW
Beginning Cash - ₱ 19,482,870.93 ₱ 19,859,640.12 ₱ 21,339,152.47 ₱ 23,972,520.13
Sales Revenue ₱ 27,000,000.00 ₱ 29,140,000.00 ₱ 31,360,000.00 ₱ 33,660,000.00 ₱ 36,040,000.00
Sales of Assets - - - - -
Loans ₱ 20,000,000.00 - - - -
Capital ₱ 10,000,000.00 - - - -
Total Cash In ₱ 57,000,000.00 ₱ 48,622,870.93 ₱ 51,219,640.12 ₱ 54,999,152.47 ₱ 60,012,520.13

CASH OUTFLOW
Cost of Goods Sold ₱ 15,150,000.00 ₱ 15,655,000.00 ₱ 16,160,000.00 ₱ 16,665,000.00 ₱ 17,170,000.00
Capital Requirements ₱ 10,000,000.00 - - - -
GSAE ₱ 3,035,050.00 ₱ 3,393,052.50 ₱ 3,532,705.13 ₱ 3,679,340.38 ₱ 3,833,307.40
Loan Payments ₱ 6,687,594.07 ₱ 6,687,594.07 ₱ 6,687,594.07 ₱ 6,687,594.07 ₱ 6,687,594.07

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Tax Payments ₱ 2,644,485.00 ₱ 3,027,584.25 ₱ 3,500,188.46 ₱ 3,994,697.89 ₱ 4,511,007.78

Total Cash Out ₱ 37,517,129.07 ₱ 28,763,230.82 ₱ 29,880,487.65 ₱ 31,026,632.33 ₱ 32,201,909.25

Net Cash Flow ₱ 19,482,870.93 ₱ 19,859,640.12 ₱ 21,339,152.47 ₱ 23,972,520.13 ₱ 27,810,610.89

SECTION 4: Financial Viability Measures

Profitability Ratios

Year 1 Year 2 Year 3 Year 4 Year 5

Net Income ₱ 6,170,465.00 ₱ 7,064,363.25 ₱ 8,167,106.41 ₱ 9,320,961.73 ₱ 10,525,684.82
Total Assets ₱ 61,704,650.00 ₱ 70,643,632.50 ₱ 81,671,064.13 ₱ 93,209,617.33 ₱ 105,256,848.20
Return on Assets 10.00% 10.00% 10.00% 10.00% 10.00%

Growth Ratios

Year 1 Year 2 Year 3 Year 4 Year 5

Sales ₱ 27,000,000.00 ₱ 29,140,000.00 ₱ 31,360,000.00 ₱ 33,660,000.00 ₱ 36,040,000.00
Cost of Goods Sold ₱ 15,150,000.00 ₱ 15,655,000.00 ₱ 16,160,000.00 ₱ 16,665,000.00 ₱ 17,170,000.00
Gross Profit Ratios 43.89% 46.28% 48.47% 50.49% 52.36%

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Break-Even Analysis

Return of Investment (ROI) and Payback Period

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Year 1 Year 2 Year 3 Year 4 Year 5

Net Income Before Tax ₱ 8,814,950.00 ₱ 10,091,947.50 ₱ 11,667,294.88 ₱ 13,315,659.62 ₱ 15,036,692.60
Capital ₱ 10,000,000.00 ₱ 10,000,000.00 ₱ 10,000,000.00 ₱ 10,000,000.00 ₱ 10,000,000.00
Return on Investment 88.15% 100.92% 116.67% 133.16% 150.37%

Payback period in capital budgeting refers to the time required to recoup the funds expended in an investment, or
to reach the break-even point. As given on the table above, the return of investment greater than 100% is at Year 2.
Therefore, we can say that the Payback Period is 2 years.

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